TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Monday, October 10, 2016

The IRS Scandal, Day 1250

IRS Logo 2World Tribune, Unforgiven: IRS Has Not Only Continued Its War on Tea Party Groups, But Taken It Public:

After admitting it targeted tea party groups for special scrutiny in 2013, the IRS promised to process the groups’ applications in a timely fashion.

Three years later, tea party groups say the tax agency has begun a new round of harassment.

The IRS has sent a new set of “prodding questions” to the groups, demanding still more information, according to an Oct. 4 report by The Washington Times.

The IRS also publicly released one of the sets of questions it sent to the Texas Patriots Tea Party (TPTP), which made public secret taxpayer information that is supposed to be protected, the group’s lawyer said. ...

Two other tea party groups that were targeted by the IRS are still awaiting approval. Unite in Action, a Michigan-based group, applied in 2010, and the Albuquerque Tea Party applied nearly seven years ago, in December 2009.

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October 10, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 9, 2016

How to Fix Law School

Fix ItAry Rosenbaum (J.D. American, Tax LL.M. Boston University), How to Fix Law School:

I enjoyed law school as much as I enjoyed the preparation for my colonoscopy, it was that good. My time at the American University Washington College of Law (WCL) wasn't a great experience because I felt like I was hoodwinked into going and was promised a bill of goods that they failed to deliver. ...

Time hasn't been kind to my waistline and WCL.

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October 9, 2016 in Legal Education | Permalink | Comments (4)

‘Informed By What I Am’: Judges Talk Faith, Duty And The Law, ‘Informed by What I Am’: Judges Talk Faith, Duty and the Law:

Over the past eight years, President Barack Obama has boosted diversity on the federal bench with his judicial picks. This month he added a name to his list of barrier-busting nominees: Abid Qureshi, believed to be the first Muslim tapped for a federal judgeship. ...

[A]sk judges if their faith factors in their work and most provide a two-part response. They say they don’t apply religious doctrine to cases. However, they acknowledge that religion can inform their sense of justice, empathy and values. Studies have shown a correlation between judges’ religious affiliations and decisions on abortion, gay rights, religious freedom and other hot-button issues. ...

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October 9, 2016 in Legal Education | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #1 (and already #47 in all-time downloads among 12,250 tax papers):

  1. [2,543 Downloads]  Families Facing Tax Increases Under Trump's Latest Tax Plan, by Lily L. Batchelder (NYU)
  2. [241 Downloads]  Transfer Pricing Money: The Chevron Case, by Richard J. Vann (Sydney) & Graeme S. Cooper (Sydney)
  3. [182 Downloads]  Financial Advisers Can't Overlook the Prudent Investor Rule, by Max M. Schanzenbach (Northwestern) & Robert H. Sitkoff (Harvard)
  4. [176 Downloads]  Law and Macroeconomics: The Law and Economics of Recessions, by Yair Listokin (Yale)
  5. [168 Downloads]  Taxation and Human Rights: A Delicate Balance, by Reuven Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. 2017, Michigan)

October 9, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

New York City Law Firm Launched To Serve Legal Needs Of Religious Institutions And Individuals

FaithWall Street Journal, Law Firm for Churches Launches in New York City:

A new law firm has opened its doors near Times Square founded on the faith that churches, synagogues, mosques and other religious institutions in New York City could use some legal help.

Nelson Madden Black LLP, as the firm is called, says it’s the first private law firm based in the city that’s “dedicated to the legal representation of religious institutions and individuals.” Announcing its launch this week, the firm said it will offer a “full spectrum of litigation, transactional and advisory legal services” to clients of all faiths.

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October 9, 2016 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1249

IRS Logo 2Bill Moyers & Company, This Week in Political Money: Billionaire Backs IRS Impeachment:

The Republican Party is waging war on the IRS (again). The cause du jour is impeachment of the agency’s head, John Koskinen, who was in that role when employees at the IRS destroyed records sought during a previous congressional crusade against the agency.Koskinen says he knew nothing about it, but Republicans want to hold him accountable anyway.

The “Impeach Koskinen” caucus is backed by the 45Committee, a political nonprofit funded by billionaire Todd Ricketts, a major GOP donor whose family owns the Chicago Cubs.Politico reported on Monday that 45Committee was spending more than $1 million on a week of advertising. Federal Communications Commission records compiled using the Center for Responsive Politics’ new political ad watch tool and reviewed by show ad buys on several television stations in two swing states: Florida and Nevada.

Drumming up anger at the IRS could help turn out conservative voters in these key states, where there are also Senate races that could help determine control of Congress’ upper chamber. But it could also backfire. Some GOP senators have been hoping to put off the impeachment push until after the election, worried that another crusade to demonize an Obama-appointed bureaucrat might not play well with moderates in the party.

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October 9, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, October 8, 2016

Amidst Declining Enrollment And Budget Deficits, Minnesota Law School Dean Seeks To Shift Narrative

Minnesota LogoFollowing up on my previous posts (links below) on the enormous financial difficulties at the University of Minnesota Law School: Minnesota Daily, New University Law School Dean Aims to Refocus School's Goals:

Amid declining enrollment and budget deficits at the University of Minnesota’s Law School, the new dean wants to shift the narrative.

Since taking over leadership at the law school in July, Garry Jenkins has pushed aside stories about mending declining enrollment to focus on curriculum and job placement instead.

Applications to the University’s law school dropped by nearly 50 percent between 2010 and 2015, and first-year enrollments fell by over 30 percent, leading to a loss of tuition revenue for the school.


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October 8, 2016 in Legal Education | Permalink | Comments (1)

This Week's Ten Most Popular TaxProf Blog Posts

Trump’s Ex-Accountant Jack Mitnick: He’s No Tax Genius

The Daily Beast, Trump’s Ex-Accountant Jack Mitnick: He’s No Tax Genius:

This past week, Donald Trump's campaign surrogates attempted to argue that the candidate is a "genius" for turning a nearly $1 billion loss into a tax avoidance strategy for up to 18 years. But now the accountant who compiled Trump's 1995 tax return — and helped verify it for The New York Times — has refuted that narrative in a series of interviews. Jack Mitnick, who handled Trump's taxes until 1996, told Inside Edition on Tuesday, “I did all the tax preparation. He never saw the product until it was presented to him for signature." Pushing back at Trump's own suggestion that he "brilliantly" used tax laws to his own advantage, Mitnick added, “I’m the one who did all the work."

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October 8, 2016 in Political News, Tax | Permalink | Comments (7)

Indiana Tech Law School's In-State Bar Passage Rate Doubles—To 16.67%

Indiana Tech (2016)Following up on my previous posts:

Above the Law, Law School’s Abysmal Bar Exam Pass Rate Improves To… 23.1 Percent:

Last month, after the scoring of the state bar exam was completed, the charter class of Indiana Tech Law School posted what was accurately described as the “worst bar exam results ever.” Out of 12 graduates who had taken the Indiana bar exam, only one of them passed. At the time, the overall pass rate for Indiana Tech Law graduates was 8.33 percent, and a school spokesperson refused to confirm the overall pass rate because five graduates were appealing their scores on the exam.

With the appeals process having concluded this week, the Indiana Lawyer now reports that an additional graduate of Indiana Tech passed the state bar exam on the first try, bringing the school’s passage rate to 16.7 percent.

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October 8, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1248

IRS Logo 2The Atlantic, The Conservative Crusade Against the IRS Commissioner:

Feeling wrung out by the grossness of the presidential race, the hurricane buffeting the East Coast, and the nationwide epidemic of scary clowns? Buck up, camper, and at least be thankful that you are not IRS Commissioner John Koskinen.

Heading the most loathed agency in the federal government takes a psychic toll on a good day. But the past 17 months or so have been a pig pile of lousy days for Koskinen, as conservatives have led a multi-pronged crusade to publicly humiliate him, drive him from office, and strip him of his pension. On September 21, shortly before Congress fled town for the remainder of election, Koskinen had to go before the House Judiciary Committee for a formal impeachment hearing.

Then, last week, the dark-money group 45Committee announced that it was dropping more than $1 million on ads lobbying for the commissioner’s ouster. “Call the House of Representatives and tell them to vote to impeach Commissioner Koskinen now,” urges the spot, which presents impeachment as the last, best hope for beating back “the arrogance of the Obama administration.”

What did Koskinen do to deserve all this? It’s complicated. The roots of conservatives’ outrage lie in the 2013 revelation that the IRS had improperly scrutinized Tea Party groups (among others) seeking tax-exempt status. An FBI probe found no evidence of “enemy hunting.” But conservatives have been super miffed at the agency ever since.

“The government went after people for their political beliefs,” fumes Rep. Jim Jordan, head of the House Freedom Caucus, which has made Koskinen’s impeachment a pet cause. ‘This is not just any old agency,” Jordan reminded me. “This is the IRS. Most people get a letter from the IRS, they sit down, wipe their brow, and their resting heart rate suddenly gets higher. Now we know that they systematically targeted people for their political persuasion.” ...

The Treasury Department’s Inspector General ruled the loss of the tapes an unintentional screw up. Conservatives have decided nonetheless that Koskinen must go. The commissioner has been hauled before multiple committees multiple times in both chambers of Congress. House Republicans have accused him of arrogance, dishonesty, obstruction, foot-dragging, and being generally unhelpful in their investigation. Last October, Rep. Jason Chaffetz, head of the Government Oversight and Reform Committee, introduced a resolution to begin impeachment proceedings. ...

At this point, Jordan doesn’t much care whether the destruction of the backup tapes was part of a cover up or simply the result of incompetence. “No one is saying this was all intentional,” Jordan assured me. “But where was the gravity of the situation?” He also acknowledges that Koskinen is not at fault for the original targeting offense. Impeachment advocates, however, really feel that someone’s head needs to roll. “It was political speech they targeted,” marveled Jordan. “And for no one to be held accountable?”

Even so, impeaching a public official is like going nuclear: a measure reserved for the very worst transgressions. ...

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October 8, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, October 7, 2016

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new article by Edward A. Zelinsky (Cardozo), The Political Process Argument for the Supreme Court to Overrule Quill, 82 Brook. L. Rev. (forthcoming 2017).

HemelIn Quill Corp. v. North Dakota, 504 U.S. 298 (1992), the Supreme Court held that states cannot collect sales tax from out-of-state vendors who lack a “physical presence” within the state. While the constitutional justification for Quill’s holding was questionable from the outset, Quill’s future is suddenly in doubt as well. In a concurring opinion last year, Justice Kennedy called on the Court to reconsider Quill, and Alabama and South Dakota have both taken steps to generate a test case since then.

The pragmatic case for overruling Quill is clear. Quill drives a hole in state budgets: by one estimate, states lost more than $23 billion in sales tax revenue on transactions with out-of-state vendors in 2012 alone. Moreover, Quill puts vendors with a brick-and-mortar presence at a disadvantage vis-à-vis remote competitors, leading (arguably) to unfairness and (almost certainly) to inefficiency. Perhaps the best that can be said in Quill’s favor is that it’s up to Congress—not the courts—to fix this mess. Because Quill was decided under the dormant Commerce Clause, Congress has the power to overturn it via legislation. In a provocative new article, Edward Zelinsky considers whether Quill’s fate should be left to the political process.

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October 7, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Goldilocks Meets Private Equity: Taxing Carried Interest Just Right

Tax Polcy Center Logo (2017)Donald Marron (Tax Policy Center), Goldilocks Meets Private Equity: Taxing Carried Interest Just Right:

Controversy rages about how to tax carried interest. One view sees carry as compensation that should be taxed like other labor income. Another sees carry as a reward for financial risk-taking that should be taxed like capital income. A third sees carry as creating a costly tax arbitrage. In this paper, Donald Marron shows how we can reconcile these three views. Current practice taxes carry too little. Treating it as labor income without other reforms taxes it too much. To tax carried interest just right, it should be labor income for managers and deductible against ordinary income for investors.

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October 7, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

65% Of Admissions Offices Want Some Law Schools To Close; 52% Want ABA Stripped Of Its Accreditation Power

KaplanKaplan Test Prep Survey, Law Schools Show Continued Optimism, but Fragile Recovery Leads Most to Favor the Closure of Existing JD Programs and Limiting New Ones:

This past admissions cycle, the legal education community saw something they haven’t seen since 2009: an increase in the number of law school applications and LSAT® takers. This momentum is reflected in continued optimism that Kaplan Test Prep finds in its 2016 survey of law school admissions officers.* Of the 111 law schools from around country that participated in the annual survey, 92 percent say that they are feeling “more optimistic about the state of legal education” than they did one year ago.  That optimism leads 78 percent of respondents to express confidence that their law school will see another increase in applications for the 2016-2017 application cycle — a far cry from the 46% who expressed such confidence, when Kaplan conducted its 2014 survey.

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October 7, 2016 in Legal Education | Permalink | Comments (0)

Weekly Legal Education Roundup

Princeton Review's Best 172 Law Schools (2017 Edition)

Princeton ReviewThe Princeton Review has published the 2017 edition of The Best 172 Law Schools (press release) (FAQs) (methodology):

The Princeton Review tallied its lists based on its surveys of 19,400 students attending the 172 law schools [an average of 113 per school]. The 80-question survey asked students to rate their schools on several topics and report on their experiences. Some ranking list tallies also factored in school-reported data.

Best Professors:  Based on student answers to survey questions concerning how good their professors are as teachers and how accessible they are outside the classroom.

  1. Boston University
  2. Virginia
  3. Chicago
  4. Duke
  5. Stanford
  6. Washington & Lee
  7. Pepperdine
  8. St. Thomas (Minnesota)
  9. Charleston
  10. Georgia

Best Quality of Life:  Based on student answers to survey questions on: whether there is a strong sense of community at the school, whether differing opinions are tolerated in the classroom, the location of the school, the quality of social life at the school, the school's research resources (library, computer and database resources). 

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October 7, 2016 in Law School Rankings, Legal Education | Permalink | Comments (1)

6th Annual NYU/UCLA Tax Policy Symposium:  Tax Policy And Upward Mobility

NYU UCLA (2016)The Sixth Annual NYU/UCLA Tax Policy Symposium on Tax Policy and Upward Mobility takes place today at UCLA:

This year’s symposium will showcase recent research regarding social mobility and examine how federal, state, and local tax policies promote or frustrate the ability of individuals to climb the income ladder in American society. 

Raj Chetty (Stanford) & Miles Corak (Ottawa), Overview of Research on Upward Mobility
Discussant:  Alan Auerbach (UC-Berkeley)

Susan Dynarski (Michigan), Tax Benefits for College Attendance (with Judith Scott-Clayton (Columbia))
Discussant:  Deborah Schenk (NYU)

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October 7, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

University Of Washington Hosts 2016 Tax Symposium

University of Washington Logo (2016)The University of Washington hosts its Fourth Annual Tax Symposium today:

Panel #1:  Taxpayer Information Rights:

  • Michael Hatfield (Washington), Cybersecurity, Privacy, and Taxpayer Information
  • Adam Thimmesch (Nebraska), Tax Privacy Framework
  • Filip Debelva (KU Leuven, Belgium), Privacy and Confidentiality in Exchange of Information Procedures: Some Uncertainties, Many Issues, but Few Solutions
  • Shannon McCormack (Washington) (moderator)

Panel #2:  Compliance and Administration – Part 1:

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October 7, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1247

IRS Logo 2Forbes: The IRS: A Law Unto Itself, by Bill Archer:

Americans have long had an uneasy relationship with the nation’s tax collector. In the early 1990s, investigative reporter David Burnham wrote an excellent book, “A Law Unto Itself: The IRS and the Abuse of Power” which catalogued a lengthy and continuing history of the Internal Revenue Service’s (IRS) misconduct and mistreatment of taxpayers. This history of misconduct will once again come under close examination later this week as the IRS Commissioner John Koskinen testifies before Congress’ Judiciary Committee to explain the agency’s actions. ...

[R]ecent events make it clear the IRS remains abusive towards taxpayers and often unaccountable. Prior to a 2013 Treasury Inspector Report that would highlight damning IRS misconduct, the IRS head of the tax-exempt organizations group attempted to sneak in an apology for inappropriately flagging conservative organization exemption applications for additional scrutiny. Lois Lerner claimed the practice was initiated by low-level workers in Cincinnati. As we now know, that story was false; scrutiny of the conservative groups was directed by Lerner and other high level IRS officials. The IRS to this day continues to stonewall investigations in an attempt to cover their tracks of misconduct.

In early August, the U.S. Court of Appeals for the District of Columbia in True the Vote, Inc. v. IRS delivered a stinging rebuke to the IRS for attempting to dismiss a lawsuit over an organization’s exemption application. The IRS argued the case was moot because following the 2013 scandal the IRS (it claimed) had ceased its misconduct. The court wrote: “ Parallel to Joseph Heller’s catch, the IRS is telling the applicants in these cases that ‘we have been violating your rights and not properly processing your applications. You are entitled to have your applications processed. But if you ask for that processing by way of a lawsuit, then you can’t have it.’ We would advise the IRS: if you haven’t ceased to violate the rights of the taxpayers, then there is no cessation.”

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October 7, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, October 6, 2016

Fleming Presents Defending Worldwide Taxation Today At Vienna University

FlemingJ. Clifton Fleming, Jr. (BYU) presents Defending Worldwide Taxation and Addressing Inversions with a Shareholder-Based Definition of Corporate Residence, 2016 BYU L. Rev. ___ (with Robert Peroni (Texas) & Stephen Shay (Harvard)), at the Institute for Austrian and International Tax Law at Vienna University of Economics and Business:

This article argues that a principled, efficient, and practical definition of corporate residence is necessary even if some form of corporate integration is adopted, and that such a definition is a key element in designing either a real worldwide or a territorial income tax system as well as a potential restraint on the inversion phenomenon. The article proposes that the United States adopt a shareholder-based definition of corporate residence that is structured as follows:

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October 6, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Common Claims About Proposition 13

How Hillary Clinton And Donald Trump Would Tax The 1 Percent

Vox, How Hillary Clinton and Donald Trump Would Tax the 1 Percent, in One Chart:

On Monday, Marc Goldwein of the Committee for a Responsible Federal Budget shared an updated analysis of how each candidate’s tax plans would affect the top 1 percent of American income earners:


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October 6, 2016 in Political News, Tax | Permalink | Comments (1)

Wendi Adelson: 'Ill-Fated Romance Took Me To Tallahassee, Love For My Children Kept Me There Despite More Lucrative Job Offers Elsewhere'

AdelsonAs prosecutors in the Dan Markel murder "zero in" on the Adelson family and Hurricane Matthew targets Florida, a reader sent me an item that I have not seen reported elsewhere:  Wendi Adelson's Truman Scholar profile, published three months before Dan was killed.  This excerpt is especially chilling:

A Clinical Professor and the Director of the Medical Legal Partnership at FSU’s College of Law, Wendi, who is a native Floridian, had this to say about what informed her decision to become a lawyer and how she arrived at Florida State University:

I screwed up fantastically and ended up with a dream job as a clinical law professor. I fell in love with the wrong man, and he got a job in Tallahassee. I had wanted to be in DC or become a foreign service officer, or in the previous few years, live closely to my family in South Florida. So, ill-fated romance took me to Tallahassee, and love for my children keeps me here.

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October 6, 2016 in Legal Education | Permalink | Comments (28)

Pepperdine Law School Dean Search

Pepperdine Law SchoolAs I blogged in April, Pepperdine Law School Dean Deanell Tacha has extended her five-year term to continue serving through our ABA Re-Accreditation visit this month and will retire on December 31, 2016.  She has sent this letter to various leaders in legal education reflecting on her time at Pepperdine and inviting nominations to succeed her as dean of this very special law school:

This is a bittersweet moment in my life. After 5½ wonderful years as Dean of the Pepperdine University School of Law, I have decided it is time to yield this leadership position and return to my home state of Kansas. I know, some would question the judgment of trading the ocean for the plains, but it is right for me!

I write today to ask your assistance in helping Pepperdine choose the right successor to build on our progress and secure Pepperdine’s unique place as one of the nation’s premiere Christian law schools.

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October 6, 2016 in Legal Education | Permalink | Comments (0)

Aprill & Mayer:  The Relationship Between The Trump Foundation And Trump’s Tax Returns

AM4TaxProf Blog op-ed:  Assigning a Tax Lesson: The Relationship between the Trump Foundation and Trump’s Tax Returns, by Ellen P. Aprill (Loyola) & Lloyd Hitoshi Mayer (Notre Dame):

As the debate between the Vice Presidential candidates Wednesday night made clear, Donald Trump’s refusal to release his tax returns remains an important campaign issue. The extraordinary tax losses that Donald J. Trump reportedly had in 1995 emphasize the need for him to fully disclose his tax returns for all years from then forward. Without disclosure of his federal income tax returns, we cannot begin to evaluate fully his claim on Tuesday that he has “legally” and “brilliantly” complied with all of our complicated tax laws.

The ongoing tax issues relating to his foundation came to light only because of the required disclosure of those returns. Those issues — and the foundation’s failure to register to solicit charitable contributions that has now resulted in a cease and desist order from the New York Attorney General — seem to demonstrate a woeful ignorance of the applicable law or a complete disregard of it, either of which would be of even greater concern if also reflected in his personal and business tax positions. And at least one issue raised by the foundation’s tax filings can be resolved only with full disclosure of Mr. Trump’s personal tax situation.

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October 6, 2016 in Political News, Tax | Permalink | Comments (4)

2016 International Tax Competitiveness Ranking: U.S. Is 5th From The Bottom

ITCPress Release:

[T]he Tax Foundation released the third annual International Tax Competitiveness Index. Once again, the United States ranks among the bottom 5 countries with the 5th least competitive tax system in the OECD. Only Greece, Portugal, Italy, and France have less competitive tax codes. On the other end of the spectrum, Estonia takes the number one spot once again, with New Zealand and Latvia having the second and third most competitive tax systems, respectively.

Table 5

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October 6, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

The IRS Scandal, Day 1246

IRS Logo 2Washington Times. IRS Subjects Tea Party Groups to New Round of Scrutiny, Publicizes Tax Return Data:

The IRS‘ battle against holdout tea party groups is heating up again, after the tax agency promised it would begin processing their long-delayed applications, but sent a new round of prodding questions demanding still more information.

More jarringly, the IRS then publicly released one of the sets of questions it sent to the Texas Patriots Tea Party — a move the group’s lawyer says puts secret taxpayer return information, supposed to be protected, out in the public.

Tax experts say the IRS may be on safe legal ground, since the filing was made as part of a court case, and that’s one of the few narrow exceptions to strict IRS privacy laws.

Still, the move to release the information has inflamed an already tense class action legal battle between the IRS and tea party groups who feel the agency is still targeting them more than three years after it promised to cease. “The IRS has taken the unprecedented step of publicly filing actual return information,” said Edward Greim, who is handling the case on behalf of more than 400 groups targeted by the IRS. He said the questions asked by the IRS show the agency has not ceased the intrusive questioning that landed it in trouble in the first place back in 2013. Mr. Greim said releasing the letter is proof that the IRS can’t be trusted to fairly handle the cases. ...

In addition to the TPTP, two other tea party groups that were targeted by the IRS are still awaiting approval. Unite in Action, a Michigan-based group, applied in 2010, and the Albuquerque Tea Party applied nearly seven years ago, in December 2009.

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October 6, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, October 5, 2016

Fleischer Presents The Libertarian Case For A Universal Basic Income Today At Northwestern

Fleischer (Miranda)Miranda Perry Fleischer presents The Libertarian Case for a Universal Basic Income (with Daniel Hemel (Chicago)) at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Imagine a society in which each member regardless of need, receives an unconditional basic income – perhaps $1,000 a month, perhaps more, perhaps less. This idea (known as a universal basic income, or “UBI”) is garnering support around the globe and across the political spectrum, from the conservative thinker Charles Murray to the entrepreneurs of Silicon Valley to the social democratic state of Finland. Tax law scholars will recognize this concept as a variation of the negative income tax. Despite this obvious overlap and the UBI’s growing popularity among policymakers, the UBI has not attracted widespread attention from legal scholars in recent years. This Article begins to fill that gap by examining the theoretical underpinnings of a UBI and analyzing how those underpinnings illuminate relevant design questions.

Notably, this Article argues that a nuanced exploration of libertarian theory justifies the provision of a UBI on normative – and not simply pragmatic – grounds. We ground this argument in libertarian ideals for three reasons. ...

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October 5, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (6)

Merrill Presents Innovation Boxes: BEPS And Beyond Today At Pennsylvania

MerrillPeter Merrill (PricewaterhouseCoopers; former Chief Economist, Joint Committee on Taxation) presents Innovation Boxes: BEPS and Beyond at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

Over the last 15 years, 16 countries have adopted intellectual property (IP) or patent box regimes, including three G7 countries. This paper explains the IP box concept, outlines recent U.S. IP box proposals with a focus on the Boustany-Neal discussion draft, and explains changes adopted in 2015 to the Organisation for Economic Co-operation and Development (OECD) standards for determining whether IP boxes should be treated as “harmful preferential tax regimes.” \

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October 5, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

NY Times:  When It Comes To Tax Avoidance, Donald Trump’s Just A Small Fry

USP ShellGamesNew York Times: When It Comes to Tax Avoidance, Donald Trump’s Just a Small Fry, by Andrew Ross Sorkin:

Not paying taxes “makes me smart,” Donald J. Trump said last week. His surrogates called him “a genius” for his recently revealed tax avoidance strategies.

Well, if they are right, the executives running corporate America are absolute virtuosos.

An exhaustive study being released on Tuesday by a group of researchers shows in detail how Fortune 500 companies have managed to shelter trillions of dollars in profits offshore from being taxed. Mr. Trump’s efforts pale by comparison. Worse, the companies have managed to hide many of their tax havens completely, in many cases reporting different numbers to different government agencies to obfuscate exactly how they’ve avoided Uncle Sam.

And, yes, it is all legal.

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October 5, 2016 in Tax | Permalink | Comments (0)

California State University Issues Call For Tax Papers

Cal StateThe Bookstein Institute for Higher Education in Taxation at California State University, Northridge, in collaboration with the School of Business at Pacific Lutheran University, has issued a Call for Papers for The 2017 Tax Development Conference to be held at California State University, Northridge on Saturday, April 29, 2017:

The conference aims to bring together tax professors at business schools to facilitate the exchange of ideas and promote collaboration. Papers on any aspect of tax research, practice, or classroom pedagogy should be submitted electronically to Fabio Ambrosio no later than February 17, 2017. Papers at any stage (other than those already accepted for publication) are invited.

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October 5, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Prosecutors Zero In On Adelson Family After Plea Deal With Hit Man, Arrest Of Accomplice In Markel Murder

Adelson FamilyNational Law Journal, Police Zero In On Murdered Law Prof’s In-laws, Experts Say:

Prosecutors likely hope that by arresting Magbanua and charging her as an accomplice in Markel’s murder—not with a lesser crime such as accessory to murder—she will strike a deal and implicate Charlie Adelson and perhaps his mother, Donna Adelson, as the architects of the murder, said Charles Rose III, a law professor at Stetson University College of Law.

“They’re trying to get her to roll,” Rose said, noting it’s a common tactic to try and cut a deal with the least culpable person in a criminal enterprise. “They’ve put Katherine between a rock and a hard place. They’re trying to get her to provide the piece of information the prosecutors don’t yet have that will get an indictment of the Adelsons.”

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October 5, 2016 in Legal Education | Permalink | Comments (5)

WSJ Should Publish Law School Rankings To Supplant U.S. News, Focusing On Student Outputs (Not Inputs), Quantitative Measures Of Faculty Research (Not Reputation Surveys)

2017John O. McGinnis (Northwestern), A WSJ Ranking of Law Schools Would Improve Legal Education:

The Wall Street Journal in partnership with the Times Educational Supplement has just released a ranking of colleges. It provides a useful corrective to the more famous rankings by U.S. News and World Report, because it focuses more on the student outputs rather than inputs. That is, while U.S. News heavily weights the credentials of incoming students, such as the SAT scores and high school grades, the Wall Street Journal weights the outputs, like student satisfaction and salaries earned at graduation. This ranking system also appears to take a more quantitative approach to the quality of the faculty, relying less on reputation and more on actual research output.

It would be hugely beneficial for legal education, if this consortium were to undertake similar rankings of law schools. It would undermine the unhealthy power of US News’ ranking of law schools, which, as with colleges, focuses more on student inputs than outputs. ...

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October 5, 2016 in Law School Rankings, Legal Education | Permalink | Comments (5)

More Trump Tax News

The IRS Scandal, Day 1245

IRS Logo 2Politico, GOP Mega-Donors Ready New IRS Impeachment Ads:

A new conservative outside group with deep pockets is planning a robust ad campaign urging Congress to impeach the IRS commissioner — a move sure to cause GOP leaders some headaches this fall.

Founded by GOP mega-donor Todd Ricketts, 45Committee will spend nearly $1 million on a week’s worth of cable TV and digital ads encouraging voters to pressure Congress to impeach tax chief John Koskinen.

Officials at the tax-exempt 501(c)(4), run by family owners of the Chicago Cubs, told POLITICO the ads will start Tuesday and air nationwide in every congressional district, from FOX to MSNBC to CNN and more. More could follow, they added, in an effort to keep the issue front and center.

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October 5, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, October 4, 2016

Plea Deal For Hit Man In Dan Markel Murder

RiveraTallahassee Democrat, Markel Suspect Rivera Sentenced to 19 Years in Plea Deal:

Luis Rivera pleaded guilty to second-degree murder in the shooting of Dan Markel. Rivera will spend 19 years in prison for his role in what investigators are calling a murder-for-hire plot. ...

Rivera acknowledged in court Tuesday he has provided a statement to investigators regarding the plot.

WCTV, Plea Deal For Suspect in Dan Markel Murder?:

The state attorney's office has suggested that Luis Rivera may be cooperating in the murder-for-hire case. Rivera was scheduled to go before a judge 8:30 a.m. Tuesday, but the hearing was abruptly changed and pushed back to 3 p.m. Rivera is currently one of three suspects in the FSU professor's murder and is slated to stand trial in three weeks.

When asked about the delay in today's hearing, State Attorney Willie Meggs indicated there is a tentative deal. There's no word yet on the details of that deal. "We gave up a little more than we wanted to give up in the desire to get information that we needed," Meggs told WCTV. "We knew we would have to give up something and we did." ...

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October 4, 2016 in Legal Education | Permalink | Comments (16)

Lessons From Hamilton For The University Of Chicago Law School Class Of 2019


University of Chicago Law School, William Baude's "Hamilton" Welcome to the Class of 2019:

The musical’s opening number begins with Alexander Hamilton himself arriving in a new city to start a new challenging endeavor. ... [I]  want to talk to you briefly about Hamilton, and to offer you three ways that you might consider Hamilton’s advice for your own time in law school.

Lesson Number One: Take ideas seriously. Relentlessly question the conventional wisdom.  Say what you will about Alexander Hamilton, but he had audacity. ... My first suggestion is that you take a little bit of Hamilton’s … attitude with you into your classes. ...

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October 4, 2016 in Legal Education | Permalink | Comments (0)

Graetz Presents Can A 20th Century Business Income Tax Regime Serve A 21st Century Economy? Today At Columbia

Graetz (2015)Michael J. Graetz (Columbia) presents Can a 20th Century Business Income Tax Regime Serve a 21st Century Economy? (in Follow the Money: Essays on International Taxation Introduction & Ch. 7 (Yale 2016) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Chapter 7 is the most recently published essay of this collection. It reviews the contemporary challenges of international tax policy, as set forth in my Parsons Lecture, delivered to the University of Sydney Law School in April 2015. After describing the decisionmaking choices and flexibility of multinational corporations and the pressures of inter-nation tax competition, the chapter explains why our 20th Century international tax system is poorly equipped to cope with the 21st Century’s technologically driven, integrated global economy. The chapter concludes with a number of predictions about directions international tax policy is likely to take.

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October 4, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Clifford:  There Is No Statistically Valid Minimum LSAT/GPA Indicator For Admission To Law School And Bar Passage

Ralph D. Clifford (UMass), Statistics Matter:

In my last post, I discussed the need to consider both sides of the ratio when examining bar passage rates. Looking only at a particular law school’s passage without examining the overall bar passage numbers can lead to incorrect conclusions. In this post, I am going to challenge the belief that law schools can easily predict which students will do well in law school and the bar. ...

Without a doubt, the objective information drives the process at most schools. ... The essence of the argument is that some students with low objective indicators should never (or at least hardly ever) be admitted to law school. See David Frakt’s LSAT Score Risk Bands.


The major problem with this argument is that it ignores what the statistics tells us about the LSAT and UGPA. ...

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October 4, 2016 in Legal Education | Permalink | Comments (3)

Clinton, Obama, Trump, And Congress Wage Estate Tax War

The Hill, War Over the Estate Tax Returns:

Battles are flaring over the estate tax, with the issue receiving increased attention from the presidential candidates, the Obama administration and Congress.

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October 4, 2016 in Political News, Tax | Permalink | Comments (3)

Utah Welcomes 93 1Ls, Down 24% From 2010: Only Top 50 Law School With <100 Students, Audacious Goal Of 100% First-Time Bar Passage, 100% Professional Employment

Utah Logo (2016)University of Utah S.J. Quinney College of Law (ranked #45 in U.S. News) welcomed 93 1Ls this Fall, up 1 from last year (and down 23% from 2010's 122). Interestingly, Utah's 50% LSAT remained 158 and 25% and 75% increased to 156 (+2) and 161 (+1), but its 25%/50%/75% GPAs all fell, to 3.33 (-.03), 3.50 (-0.7), 3.68 (-.07).  

Utah is the only Top 50 law school with an entering class under 100 for the past two years. I would love to know how they are able to balance their budget with 46 full-time faculty, giving them a reported 6.8 to 1 student/faculty ratio, lower than every law school except Columbia (ranked #4, 6.1) and Northwestern (ranked #12, 6.5).  Utah has a spectacular new building and an audacious goal of ensuring that 100% of its students pass the bar on their first attempt and land professional jobs (more here).

Here are Utah's admission data for the prior six years from Law School Transparency:

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October 4, 2016 in Legal Education | Permalink | Comments (3)

More Trump Tax News

Following up on my posts (here and here):  The Daily Beast: Art of the Steal: This is How Trump Lost $916M and Avoided Tax, by David Cay Johnston:

The big New York Times scoop that Donald Trump used $916 million of tax losses to enjoy many income tax-free years raised a question the newspaper didn’t try to answer: How did Trump do it?

Trump, the only major-party presidential nominee in four decades to keep all his tax returns secret, insists “there’s nothing to learn from them.”

Yet in one day I figured out how Trump’s advisers almost certainly arranged the massive tax losses, skipped out on a massive income-tax bill, and then fashioned a loophole with more valuable tax benefits than the already liberal tax breaks Congress gives big real-estate owners while sticking others with the bill.

Trump dumped the real costs of all this on investors who saw gold in his brand name, but who lost everything even as he was paid tens of millions of tax-free dollars.

All this came from subtle clues on the front pages of Trump’s 1995 Connecticut, New Jersey, and New York state income-tax returns. Which sums were on which lines in each state pointed to how Trump must have organized his affairs. Two of the most respected tax professors in America agree with my analysis. Edward Kleinbard of the University of Southern California and Martin J. McMahon Jr. of the University of Florida refined my view.

New York Times: The Trump Campaign’s Questionable Tax Return Justification, by Gretchen Morgenson:

Did Donald J. Trump have a fiduciary duty to keep the amount he personally owes in taxes to a minimum?

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October 4, 2016 in Political News, Tax | Permalink | Comments (7)

Joint Tax Committee Increases Estimate Of Earnings Stashed Overseas By U.S. Companies To $2.6 Trillion

Joint Tax Committee (2016)

House Ways & Means Committee Press Release, Joint Committee on Taxation Estimates Even More Foreign Earnings from U.S. Companies Stranded Overseas (Sept. 29, 2016):

On August 25, 2016, Ways and Means Committee Chairman Kevin Brady and Rep. Richard Neal requested from the JCT an updated estimate of the total amount of money accumulated deferred foreign earnings of foreign subsidiaries of U.S. corporations that is held offshore. On August 31, 2016, JCT Chief of Staff Thomas Barthold provided two separate estimates. The first estimate of $2.6 trillion (up from $2.3 trillion in 2012) is based on the most recent tax return data with a projection to 2015 based on ordinary growth of the world economies and corporate earnings and profits. The second estimate of $2.4 trillion (up from $1.8 trillion in 2012) is the amount reported by Audit Analytics based on data from financial statements of the publicly traded corporations in the Russell 1000.

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October 4, 2016 in Congressional News, Tax | Permalink | Comments (0)

The Top 1% Get 17% Of Income, 27% Of Tax Expenditures

1%Bloomberg, How the IRS Helps the Rich Get Richer:

The top 1 percent gets the most from federal tax breaks, a new report shows, fueling election-year outrage over income inequality. ...

The top 1 percent of Americans as measured by income rake in 17 percent of all U.S. income on an annual basis—before taxes, of course. And that caveat is important, according to a new analysis by the Tax Policy Center (TPC), because that select group of citizens gets 27 percent of the tax breaks doled out by the federal government.

The TPC’s calculations show an estimated $1.17 trillion in federal revenue last year going to individual tax expenditures. ... While the wealthy see an outsize benefit compared with their share, the lowest-income households get just about 4 percent of federal tax breaks, close to their portion of all pretax income. That same trend holds for taxpayers in middle- and upper-middle-income households.


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October 4, 2016 in Tax, Think Tank Reports | Permalink | Comments (4)

The IRS Scandal, Day 1244

IRS Logo 2Washington Times, Election Corruption Threat Watch: IRS Continues to Target Political Opposition:

With the illegal release of Donald Trump’s tax returns, the Internal Revenue Service (and therefore the Obama executive branch) has shown itself to be still targeting and oppressing the political opposition to the Obama/Hillary crime syndicate. After the disclosure of the IRS preventing tax-free status for Tea Party and other political groups in the last election cycle, congressional investigations followed. However, no convictions or impeachments were obtained, due to weak GOP leadership. Congress failed in its Constitutional duties. ....

Mr. Trump didn’t break any laws; all he did was lose some of his own money. What the IRS did is illegal. What the New York Times did is illegal. What Hillary Clinton has done with pay to play is illegal. What Hillary did with her private server and selling out national secrets is illegal. But no one cares about the rule of law anymore on the Left. It’s all about maintaining power at all costs. Even Republicans went after Richard Nixon, who by the way never used the IRS against his opponents. He thought about it but never did. The Left shows no such honor.

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October 4, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (10)

Monday, October 3, 2016

Fleischer Presents Taxing Wealth Today At Minnesota

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents Taxing Wealth at the University of Minnesota Law School Corporate Institute Forum on Taxation and Regulation today as part of its Perspectives on Taxation Lecture Series:

Politicians and the public frequently call for higher taxes on the wealthy to fight inequality. Although most lay discussions of wealth taxes ignore the differences among tax instruments, these differences cannot be ignored when designing a wealth tax for that purpose. Why one wishes to combat inequality—for example, to further equality of opportunity or to protect democratic institutions—influences the choice of instrument in a first-best world. In the real world, however, practical considerations—such as valuation and other administrative issues—limit our ability to pursue first-best solutions and influence the most viable second-best options.

October 3, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Tax Court Is A Court, Not An Agency Of The Executive Branch, And Thus Is Not Subject To The FOIA

Tax Court Logo 2Byers v. United States Tax Court, No. 15-1605 (D.C. D.C. Sept. 30, 2016) (citations omitted):

Plaintiff Ronald E. Byers, proceeding pro se, brings this action against the United States Tax Court (“Tax Court” or “Defendant”) pursuant to the Freedom of Information Act (“FOIA”). Relying predominately on the D.C. Circuit’s recent decision in Kuretski v. Commissioner, 755 F.3d 929 (D.C. Cir. 2014), cert. denied, 135 S. Ct. 2309 (2015), Mr. Byers argues that, for the purposes of FOIA, the Tax Court is an agency of the federal government’s Executive Branch. Thus, Mr. Byers asks this Court to order the Tax Court to turn over a wide range of records identified in his FOIA request. The Tax Court moves to dismiss the Complaint. Courts of the United States are specifically exempted from FOIA, and the Tax Court argues that Mr. Byers’s Complaint should be dismissed because the Tax Court is a court, not an agency. The resolution of the Tax Court’s motion to dismiss turns on a single legal question: Is the Tax Court a court or an agency for the purposes of FOIA?

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October 3, 2016 in New Cases, Tax | Permalink | Comments (1)

Baugh Presents Can Taxes Shape an Industry? Evidence From The 'Amazon Tax' Today At UC-Berkeley

Baugh 2Brian Baugh (Nebraska) presents Can Taxes Shape an Industry? Evidence from the Implementation of the "Amazon Tax" (with Itzhak Ben-David (Ohio State) & Hoonsuk Park (Ohio State)) at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar:

For years, online retailers have maintained a price advantage over brick-and-mortar retailers by not collecting sales tax at the time of sale. Recently, several states have required that the online retailer Amazon collect sales tax during checkout. Using transaction-level data, we document that households living in these states reduce Amazon purchases by 9.4% after sales tax laws were implemented, implying elasticities ranging from –1.2 to –1.4.

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October 3, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Former Dean:  Under The Radar Faculty 'Bloodletting' Is Resulting In A Lost Generation Of Law Profs

Bales 2TaxProf Blog op-ed: Faculty Bloodletting, by Rick Bales (Former Dean, Ohio Northern):

I've heard from faculty members at two law schools just this week who report (not for attribution) that their law schools either are laying off a substantial number of faculty (the faculty member's word was "bloodletting") or that buy-out offers have been made to all faculty. These are respectable schools, and the downsizings I am referring to have not yet been reported in the blogosphere as best I know. That probably means there are many more occurring than we know about.

I've also had occasion to browse recently the faculty bio pages of several law schools. Given the paucity of hiring over the last several years, it comes as no surprise that many schools are top-heavy, but the extent of this at some schools is astounding. It appears that at some schools, there is almost no one on the tenure-track faculty within a full generation of the average age of the students we are trying to attract.

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October 3, 2016 in Legal Education | Permalink | Comments (8)